Ilkay Gundogan
Manchester United target Ilkay Gundogan (R) close to agreeing new deal with Borussia DortmundGetty

Manchester United and Arsenal target Ilkay Gundogan is reportedly close to signing a new contract with current employers Borussia Dortmund.

This will come as a big blow for the English clubs, as they were both keen on luring the talented German to the Premier League during the summer transfer window.

Arsene Wenger is a big admirer of the player and has been linked with a move for the midfielder since last summer, but a long-term injury put paid to any move away from the club. However, the former FC Nurnberg player has recovered from the injury that kept him out of the World Cup and has been impressive in recent weeks.

Dortmund have had a poor first-half of the Bundesliga season, and were tied on points with the bottom placed club going into the Christmas break.

This led to further speculation regarding the future of the club's top players, but they have since recovered and now find themselves on the rise. They are currently in 12th place on 25 points, and are ten points behind Schalke in fourth.

However, in a blow for interested clubs, Gundogan has now hinted that a new deal is close after admitting that talks are going well.

"I don't want to say anything about it. Things are looking good," Gundogan said, as quoted by the Mirror.

The 24-year-old midfielder, who has been a key player in recent seasons, is not the only one to show loyalty to the club at a difficult time as recently star midfielder Marco Reus, who is also a target for various European heavyweights, signed a new long-term deal ending speculation about his future.

Gundogan has revealed that all the players are ecstatic over Reus' contract renewal, as various reports suggested that the German will move away from Dortmund during the summer transfer window.

"Marco's signature has made us all euphoric," Gundogan added.